Revenue & Customs Brief 33/07

Seafarers’ Earnings Deduction – New information requirement for tax returns for the year ended 5 April 2007 onwards

For tax returns for the year ended 5 April 2007 onwards, employees who enter an amount for Seafarers' Earnings Deduction ('SED') in box 1.37 of the Employment Pages are required to enter the names of the ships on which they performed employment duties as additional information in box 1.40. There are references to this new requirement beside box 1.37, on page 8 of the Notes on Employment and on page 2 of Help Sheet IR205.

This means that we will no longer need to open a formal enquiry simply to establish the name of an employee's ship in order to check whether earnings for duties performed on that vessel qualify for SED. This will allow us to focus enquiries on those cases where the status of a particular vessel may be in doubt and / or to check that the employee has satisfied the other conditions for SED and correctly calculated the amount of the deduction.

Fewer routine enquiries from HMRC for employees who observe the new requirement should help to reduce the costs of tax compliance for this category of employee.

Issued 2 April 2007